Noncompetition Agreements Generally Prohibited

Summary Content

California Business and Professions Code section 16600 provides that "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void." Therefore, section 16600 invalidates provisions in employment contracts or noncompetition agreements that prohibit an employee from working for a competitor after completion of his/her employment or imposing a penalty for doing so, unless they are necessary to protect your trade secrets.1

Noncompetition agreements are strictly construed against you and in favor of the employee.2 This body of law was developed to ensure that employees would not be prevented from earning a livelihood if they chose to leave a particular job.